Stalled Uptown 240 project sees permits expire in Dillon, but the original developer says he will not quit
The president of Uptown 240 says the company is working with an exit financier to pay off all debts and complete the project
Editor’s note: This article has been updated to reflect that the Dillon Town Council will not vote on matters related to Uptown 240 on Tuesday.
The Dillon building department notified representatives of Uptown 240, the stalled condominium project in the town core that filed for bankruptcy earlier this year, that the building permit and, with it their vested rights in the project, expired at the end of April.
But Uptown 240 President Danilo Ottoborgo said in an email Thursday, May 11, that the company expects to successfully come out of the bankruptcy case, continue construction, complete the development and clear all debt and liens on the project.
“We are committed to doing everything the company can to fulfill our purchase agreements and make Uptown 240 a success,” Ottoborgo said. “As we move forward through the reorganization process, timelines become more accurate. The Uptown team would be happy to provide the community updates on our progress and timelines as they become available.”
Yet, Dillon Town Manager Nathan Johnson said at an Economic Development Advisory Committee meeting Wednesday, April 10, Uptown 240 has a long and difficult road to get the project back on track, if it’s even possible.
Since breaking ground on the 80-unit condominium complex in June 2019, little progress has been made beyond pouring a foundation, which after several years exposed to the elements will have to be torn down and started from scratch, Johnson said.
Moreover, the project was approved under 2012 building codes, but Uptown 240 would now have to comply with 2018 building codes, including new sustainability codes, he said.
“First, in bankruptcy court, they’ve got to figure out how to pay off all these people, and that, I think, is going to be shown in their refinancing plan,” Johnson said. “But then, you have hurdle after hurdle because even if we extend the vested rights, how are you going to take your current plans to get them up to the current building codes? That’s a huge issue. And I’m sure nobody’s accounted for tearing out any concrete.”
On Tuesday, May 16, representatives from the company are expected to meet with the Town Council to discuss next steps.
Uptown 240 is on the upcoming Town Council agenda “to sort of state their case and petition the Town Council as to why the Town Council should allow them to keep their vested rights for a period of time,” Johnson said.
“That’s what we’re anticipating they’re going to want,” he said. “We don’t know.”
The Town Council will not vote on the matter related to Uptown 240 on Tuesday, Johnson said. But even if the Town Council eventually votes to pass an ordinance to extend Uptown 240’s vested rights in the project, citizens could take matters into their own hands, he said, noting that only 5% of town residents would have to petition to hold a referendum to reverse the Town Council’s decision.
If the Town Council does not grant the vested rights, the project would have to start back at square one and go through the entire zoning and planning process, receive the necessary permit approvals and complete a development review application, Johnson said. But even if the rights are granted, much of that will be required anyway, he added.
Meanwhile, the Michigan-based Porritt Group — which purchased the debt of Uptown 240 last year estimates it is now owed about $9.5 million and counting — has asked the U.S. Bankruptcy Court to let it foreclose on the property, according to reporting by BusinessDen.
The Porritt Group has said the property is worth $11.4 million rather than the $27 million that Ottoborgo claims and that Uptown 240 is not viable and is highly unlikely to be completed.
Johnson said he expects developer Jake Porritt, managing member of the Porritt Group, will also be at the Town Council meeting Tuesday. Porritt did not return an emailed request for comment Friday. His group has also proposed a significant redevelopment of other parts of Dillon’s town core.
According to Ottoborgo, Uptown 240 is working with an exit financier as part of its reorganization strategy, and he said the funds secured through that process will be used to clear debts and liens on the project.
Asked whether Uptown 240 believes the existing construction will have to be torn down and redone, Ottoborgo said the company will “rely on the expertise of our dedicated team of professionals, including engineers and architects, to evaluate the current state of the project.”
With would-be condo buyers still wondering whether they will ever receive a return on the deposits they put down on Uptown 240 units, the company appears to have a long way to go to get the project to fruition.
“We appreciate the support and understanding of our community and remain optimistic about the future of Uptown 240,” Ottoborgo said. “We are confident that we will emerge from this process stronger than ever.”
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